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Stock Market Today:

Stock Market Today: November 13, 2013

After The Close - Stocks traded broadly higher today after sluggishness in the morning session. At the close, the Dow Jones Industrial Average ended up 71 points, and the NASDAQ pushed higher by a better percentage, showing a 46-point advance. Market breadth told a similarly favorable tale of the tape, with advancers outpacing decliners by about a two-to-one margin on the Big Board.

Helping provide some fuel for the fire were strong results from retailer Macy’s (M), a company emblematic of the holiday shopping season with its annual Thanksgiving Day parade now just over two weeks away. The company also gave an upbeat outlook on the quarter in progress. Macy’s stock made a nice move today in what was a strong consumer cyclical segment. Separately, Home Depot (HD) shares were among the Dow’s leading gainers.

Another stock performing well was that of General Motors (GM). The Treasury Department noted that it sold over $1 billion of GM stock last month, pushing down the government’s stake, and suggesting Uncle Sam may be out of the auto business before too long. Such a development offered reason to be optimistic that General Motors may be able to pay dividends or buy back more of its stock within a fairly short amount of time.

In the tech sector, another group showing relative strength, the shares of Microsoft were among the day’s winners. Sentiment toward the stock has improved of late, possibly helped by the release of a more affordable Surface 2 tablet. Microsoft shares are trading at their highest levels in more than 12 years, or since the tech bubble burst early last decade. On that count, tech stocks have made a nice comeback in recent years, and it is even starting to seem like the NASDAQ may eventually revisit the highs posted in 2000, which for a long time appeared out of reach. More tech news was set for after the closing bell, with bellwether Cisco Systems reporting earnings.

There will also be more economic data to mull over on Thursday, when weekly initial jobless claims and second quarter productivity are due to be reported. Earnings are on tap for discounter Wal-Mart, as well. The retailing giant is expected to show a 5% per-share rise versus a year-earlier. - Robert Mitkowski

At the time of this writing, the author did not have positions in any of the companies mentioned.

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12:30 PM EST - The U.S. stock market opened lower this morning, but has managed to partially reverse direction. However, it remains to be seen if the bulls, who have been showing some signs of fatigue lately, can sustain their buying efforts into the afternoon. As we pass the noon hour in New York, the major averages are well off their session lows. Specifically, the Dow Jones Industrial Average is off 17 points; the broader S&P 500 Index is flat; and the technology-heavy NASDAQ is adding on 16 points. It should be noted, too, that the S&P Midcap Index is also making progress. Meanwhile, market breadth suggests a neutral bias to today’s trading, as advancers are just about even with decliners on the NYSE and the NASDAQ. Further, the market sectors are still somewhat divided. There is strength in the consumer cyclical group, and the technology stocks are having a good day. Also, energy equities are in positive territory. Nonetheless, some weakness can be seen in the basic materials issues. The utilities are also lagging today.

Technically, the S&P 500 Index continues to consolidate its recent gains. Ultimately, this is probably healthy, as it gives traders a chance to get acclimated to the market’s current level, and could well set the stage for another advance. A sideways consolidation period is preferable to a sharper pullback, and increased volatility, which can be unnerving to traders. The VIX is a bit higher today, at 13.00.

Elsewhere, there were no notable economic reports released in the United States today. However, tomorrow the employment situation is back in the spotlight, as we receive the weekly initial and continuing jobless claims. Third-quarter productivity figures are also due to be released. The economic news will likely be widely watched, as traders try to anticipate any shift in Fed policy or attitude.

There were a few earnings reports issued today. Notably, Potbelly (PBPB) stock is trading higher, after the widely popular sandwich maker released encouraging results. But, the shares of trucker YRC Worldwide (YRCW) are off sharply after that company issued disappointing figures. Meanwhile, technology leader Cisco (CSCO - Free Cisco Stock Report) is set to release its results after the close today, and that will be a widely watched issuance. - Adam Rosner

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Stocks to Watch from The Survey – The earnings calendar is rather light this morning, although Macy’s (M) has reported October-period financials. Investors were impressed with the department store operator on a number of fronts, including earnings and same-store sales, and the stock is up sharply ahead of the bell as a result. Things were not as rosy elsewhere in the retail sector, however, and the stock of Perry Ellis (PERY) is plunging in pre-market trading, after the apparel company issued disappointing guidance, as well as preliminary October-period results that fell well short of investors’ expectations. Similarly, shares of Yum! Brands (YUM) are indicating a slightly lower opening this morning, after the restaurant operator released October sales figures for its stores in China. In other news, coffee shop operator Starbucks (SBUX) has been told by an arbitrator that it must pay $2.8 billion to packaged foods company Mondelez International (MDLZ) for exiting a deal the two companies had to distribute and market Starbucks brand coffee in grocery stores. SBUX stock is down slightly in the premarket, while MDLZ shares are moving modestly higher. – Matthew E. Spencer

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.

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Before The Bell - In another instance of the classic Monday-Tuesday reversal, the stock market drifted lower for much of the session yesterday, after an incremental gain on Monday. All told, the combined moves were small, at least by recent standards, and bore no resemblance to the outsized decline last Thursday and the subsequent dramatic recovery on Friday. At that time, the 30-stock Dow Jones Industrial Average posted consecutive triple-digit moves; no such fireworks have been apparent this week--at least not yet.

In all, after some slight early strength, which had seen the Dow climb about 20 points and the NASDAQ edge up a couple of points, the market headed lower and generally stayed there for much of the day, with the Dow remaining in a narrow band with declines ranging from 40 to 70 points through mid-afternoon, as most rallies were less than half-hearted and dissipated about as quickly as they started. However, by around 3:00 (EST), the buyers stepped in and began exerting their influence. And for a time, it looked as though the market would end the day in the plus column.

However, that comeback, like others during the day, would fall a bit short, and toward the close of the session, stocks again reversed course and headed lower, albeit not aggressively so. In all, by the end of the day, the Dow was off 32 points, while the NASDAQ was basically flat. However, losing stocks held a sizable plurality over winning issues on both the Big Board and the tech-laden NASDAQ. Among individual groups, the basic materials stocks were weak for a second day in a row following some notable strength late last week, while lower crude oil prices hurt the energy-related issues. Showing strength were several of the larger-cap drug names and a few tech issues.

Once again, there was little of note going on, with the economic calendar light and just a relatively few stragglers reporting their results, as third-quarter reporting season fast concludes. The lack of much hard news and the fact that the next Federal Reserve meeting is still some weeks away (December 17th and 18th, to be exact) are making traders a bit gun shy of committing heavily to equities at this time. However, there were some remarks by a regional Fed governor suggesting a sooner rather than a later start of monetary tapering may have unnerved traders a little. That, plus frothy valuations, as the median market price-earnings ratio is now close to 19, and the accompanying median dividend yield is just 2%, are making the market a potentially less-friendly place to be than it had been for much of the long bull market.

That said, the sellers have not been able to mount any big offensive. Indeed, with the VIX volatility index still below 13, and toward the low end of the 52-week range of 23.23 to 11.05, there is still sufficient tolerance for risk among traders to keep serious sellers at bay a while longer, we think. And with the Fed remaining cooperative so far and competing fixed-income yields still unattractive to even conservative income seekers, there is little competition for stocks. Hence, the rally drones on with few interruptions of note just yet. Of course, selling squalls can surface at any time, and often they have few apparent root causes, other than excess valuations.

Looking ahead, the market will have another light news day today. Meantime, in overseas trading, the markets in Asia were lower overnight as they are in Europe this morning. Our futures are also participating in the downdraft, with the Standard and Poor's 500 Index futures now off by almost nine points, while the NASDAQ futures are in the red to the tune of 19 points. Some confusion over the direction of economic policy in China, uneasiness about the course likely to be taken by our Fed at its December FOMC meeting, and concerns about the fate of Janet Yellen's nomination to head the central bank are, along with extended equity valuations, causing some uneasiness on our shores. All of this plus the fact that the S&P 500 Index is now pushing up against some technical resistance could well presage a notably lower opening when trading commences in about an hour from now. – Harvey S. Katz

At the time of this article's writing, the author had no positions in any of the companies mentioned.

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